Would the small business job creators be hurt by allowing
the Bush tax cuts for those making over $250,000 expire? The simple answer is NO.
According to a 2010 study by the Tax
Policy Center, the average small business owner has a business income of less than $40,000 per year so they would not be affected by
an expiration of tax cuts for individuals making more than $200,000 or more or
couples making more than $250,000.
Only about 2.5% of Americans reporting business income would
see their taxes increase if the tax cuts for the wealthy were not
extended. These people are NOT
mom-and-pop business owners. They are
largely high income doctors, lawyers, investors and people who own chains of
businesses like grocery stores or dry cleaners and/or a lot of real estate.
Would
higher taxes on these high income business owners be a job killer?
The evidence is mixed. In fact,
some research
indicates that higher taxes on upper income individuals will encourage business
formation and hiring because higher income individuals will create new
businesses in order to shelter more of their income. In other words, higher taxes can actually encourage
investment and hiring.Bottom line: When someone tells you that raising taxes on the rich will be a job killer, they don't know what they are talking about.
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